Debt Stress Increasing In Australia
A recent survey has found many Australian households struggle to deal with the financial pressure associated with personal debt.
The survey, conducted by ME Bank, found that since December last year, the number of households grappling with debt had doubled. Many reported it would be a strain to meet their minimum debt repayments in the coming year.
ME Bank’s biannual Household Financial Comfort Report also found some 10% of indebted households reported debt stress which ME Bank said was the highest level they’d seen since the survey began in 2011.
The survey also found many households were experiencing “falling” or “stalling” incomes and that baby boomers also reported lower levels of financial comfort.
In other words, financial stress is very real! But in the immortal words of the former King of Pop: You are not alone.
A First Hand Story of Australian Personal Debt
One of our clients, Jane*, posted this on our website recently:
I would like to say that I was feeling overwhelmed and scared about my debt and how stressed my life was. I felt so alone and humiliated with myself (but) you guys helped me deal with the debt (and) more importantly made me feel supported and that I shouldn’t feel ashamed or overwhelmed by my situation. Thank you so much for helping me and saving me from a mental meltdown!! THANK YOU SO MUCH!!
We got a chance to speak to Jane who told us about the physical effects money stress had on her as a result of her more than $18,000 credit card debt. Too scared to tell any of her family or friends, Jane lived in shame for years; embarrassed she’d gotten herself into “such a mess” in the first place.
“I kept thinking I could do it myself but it was the interest — I couldn’t get ahead,” she explains. “Every time I thought I’d get ahead, the interest got more and more and I didn’t do anything about it.
“But there were only a couple of times I ran low on my payments. I always made the payments, even if that meant not eating — that’s when it became a real issue.”
Jane says she didn’t sleep; worrying constantly about how she’d make the payment each month. Incessantly stressed about money, the financial pressure became overwhelming.
“It was a constant struggle — with the stress of it all, and the depression that comes with it…it was just awful,” Jane says.
“I was brought up to make sure I always paid my way: ‘Always use cash and never use cards’ is what my parents always told me. I felt so ashamed — so ashamed of myself. I just put myself down more and more about how useless I was. How could anyone even care or love me because of this? I felt disgusted.”
Part of the reason Jane found herself in this dire financial situation was she used credit cards as a way to fill the hole in her life left from an attempted suicide and a history of mental health.
“I wasn’t in a great place mentally. I was going through a depression and I just bought everything on it. It was so easy,” she says.
“People talk about how you can get hooked into all sorts of things and credit cards are the same. You start off going, I’ll just use it for emergencies but before you know it, it’s like an addiction.
“I was paying bills on the credit card, if I had to get a gift or something like that — mostly it was shopping. It was supposed to make me feel better but it didn’t. It just got ridiculous, it became another addiction. It was a vicious cycle.”
While Jane accepts her part in her own debt accruement, she says the credit card companies made everything so easy.
“They don’t care; they just kept increasing my limit,” she says.
The banks weren’t much help, either. Jane says even though she approached the banks to ask for help, their response was always the same: they could give her an extension for a few weeks.
“At one stage, they did drop to a lower interest rate but they weren’t willing to negotiate at all. I begged. I pleaded. They just didn’t care. It got to the point where it was suffocating,” Jane says.
I actually approached the banks to cancel my cards, stop the interest and let me pay off the debt, but they said NO! I always wanted to pay my debt I wasn’t trying to get out of my responsibility of what I owed. – Jane
With seemingly no one to turn to help her deal with the stress and anxiety of her debt, Jane says it took a “very long time” for her to finally approach Debt Mediators.
“Your people were so caring. They made me feel like, it’s ok,” she says.
“I don’t have to feel so bad about it; that having debt doesn’t make you a bad person — which is what I always believed about myself and that’s why I didn’t get help sooner.
“Once you realise there is someone that can help you and that you can manage your debt with someone else’s help who really does care, a huge burden is lifted off.”
*name has been changed to protect the privacy of the individual